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Apple Mini Mac causes maximum buzz Add to ...

As soon as The Mac Station opened for business Wednesday, the phones at the Vancouver computer store lit up with requests for information about the new Mac Mini, a tiny but full-powered desktop computer that Apple Computer Inc. of Cupertino, Calif. had unveiled hours earlier at an annual trade show in San Francisco.

Like its popular iMac consumer desktop computer, the Mini turns the world of computer design on its head. Just five centimetres tall and about three times that wide, it weighs a little over a kilogram. It is also the most competitively priced Apple computer ever, with a base model starting at about $630.

That is still more expensive by as much as two or three hundred dollars than the base models from other computer makers such as Dell Inc. of Round Rock, Tex. and Hewlett-Packard Co. of Palo Alto, Calif.

And so, the first question about the Mini was the same one asked of Apple when it introduced the iMac in 1998: Will it sell?

Aaron Berbernakevit, one of those who was answering the phones Wednesday at The Mac Station, says he expects it to sell well.

"We're getting calls off the hook, yesterday and today, from people wanting to order the Mini," he said in a telephone interview. Apple says the Mini will be available in Canada on Jan. 29, a week after it is available in the U.S. market.

Mr. Berbernakevit believes the Mini will attract customers who have never bought an Apple computer before and have been doing their computing on a system that uses Microsoft Corp.'s Windows software. More than 90 per cent of the world's personal computer owners use a variant of the Windows operating system.

Those computer owners are more sensitive to price, say retailers and analysts, than traditional Mac buyers but are now being drawn to the Mac platform because of Apple's success in the digital entertainment field, particularly its iPod, the portable digital music player that has sold more than 10 million units since its debut in 2002.

Apple, which announced its fourth quarter financial results Wednesday after the close of markets, said it sold 4.58 million iPods during the Christmas quarter, which ended Dec. 31.

Analysts, too, believe the so-called "switchers" - computer users ready to jump from a Windows-based computer to a Mac - will be a big market for the Mini.

"The lower price point could entice PC owners to consider the Mac, particularly those with iPods," said Steven Milunovich, technology analyst with Merrill Lynch and Co. Inc. of New York. He rates Apple a "buy" with a 12-month price target of $78 (U.S.).

Wednesday, just before Apple reported a fourth-quarter profit of $295-million (U.S.) or 70 cents a share on revenue of $3.49-billion, the stock closed on the Nasdaq stock market at $65.40, up 90 cents from the previous close.

Robert Cihra, a New York-based analyst with Fulcrum Global Partners LLC, said in a report released yesterday before the results, that he believes the Mini will help Apple do better than the rest of the PC industry.

"We see incremental PC market share opportunity [with the Mini] given that we estimate one-third of today's U.S. desktop PC market is priced under $599 (U.S.) and two-thirds is priced under $899, meaning Apple was barely involved," Mr. Cihra wrote.

"We think Mini can bolster our existing expectation that Apple sees a second leg of growth beyond just iPod, driven by Mac units actually growing faster than the broader PC market."

Mr. Cihra has a "buy" recommendation on the stock with a 12-month target price of $81.

With the Mini, Apple is marketing a product in much the same way that Dell, HP and most other PC makers market their consumer desktop computers, in that the advertised sticker price usually does not include the keyboard and monitor. Keyboards usually add less than $50 to the price of a system, but the display can often be more expensive than the computer itself.

Apple already sells some of its desktop computers without a display and keyboard, but those computers, the G5 desktops, are priced and marketed to the professional user. Apple's consumer desktop models, the iMac and the eMac, come with monitors built in.

In a report released before Apple's results, Mr. Milunovich said the Mini is just the kind of product Apple has to invent from time-to-time in order to prosper.

"Apple's product innovation is key to its continued growth," Mr. Milunovich said. "[And]we continue to think Apple is building a sustainable consumer electronics franchise rather than just [getting]lucky with hot products."

But analysts say that not only has Apple got a leg up on the PC industry when it comes to innovation, it is also one of the most efficient manufacturers in the field, rivalling Dell's legendary ability to squeeze every cent out of the manufacturing process.

David Akin is a CTV correspondent and a contributing writer to The Globe and Mail.

Follow us on Twitter: @GlobeTechnology

 

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